Baucus faces the biggest campaigns of his career
By: Manu Raju and John Bresnahan May 24, 2012 11:21 PM EST

Senate Finance Committee Chairman Max Baucus is about to launch two of the most daunting campaigns of his political career at once: first, to rewrite the U.S. Tax Code, then to win reelection in 2014 after having shepherded the controversial Democratic health care law to passage.

The powerful Montana Democrat has been quietly holding one-on-one meetings with senators on his tax-writing Finance Committee and regular talks with House Ways and Means Committee Chairman Dave Camp (R-Mich.) over a far-reaching tax overhaul likely to dominate debate in the next Congress.

And in June, Baucus will detail his tax reform vision to the Bipartisan Policy Center, marking the start of what could be a titanic struggle over reforming a tax system that affects virtually every American voter and business.

It’s all risky business for Baucus: He’s vulnerable back home in a state that has voted for a Democratic presidential candidate only once in the past 40 years. And a full-blown revision of the Tax Code is a once-in-a-generation undertaking certain to spark an all-out lobbying war on Capitol Hill and at the White House.

“This is probably the biggest thing he’s ever faced in his life,” said Sen. Jay Rockefeller (D-W.Va.), a senior Finance Committee member who spent an hour with Baucus recently trading tax reform ideas. “The politics line up against it, but the country’s requirements line up for it.”

The moves come as the Senate’s third-most-senior Democrat prepares for another big battle: Winning election to a seventh term after helping author the 2010 health care law that is deeply unpopular in his red state.

The 70-year-old Baucus appears to be taking little for granted.

He has pumped money into his state party and Montana Democratic organizations and recently ran a $25,000 radio ad campaign touting his role passing a payroll tax cut. He has built a staggering war chest for himself — more than $3 million and growing.

And Baucus sidestepped a fight over health care by punting on a confirmation hearing for Marilyn Tavenner, a nominee to head the Center for Medicare & Medicaid Services, which he said was unnecessary because of her lack of support.

Behind the scenes, Baucus has worked aggressively for his Democratic colleague from Montana, Jon Tester, who faces a tough path to a second term in November. The Tester race against GOP Rep. Denny Rehberg, state operatives say, could be a major bellwether for Baucus come 2014. If Tester loses, the chances of Democrats keeping control of the Senate — and the Finance gavel remaining in Baucus’s hands — could be dashed.

“Baucus and Tester both have ‘Obamacare’ all over their hands, and it’s hurting them both,” said Bowen Greenwood, executive director of the Montana Republican Party. Greenwood said several Montana state lawmakers want to challenge Baucus next year, although no one has formally announced yet.

“Baucus is beatable, very much so, yes,” he said.

Baucus’s outlook reflects the challenges ahead for Democrats in 2012 and 2014. Not only could they lose their majority in November, but the next cycle appears to be exceedingly tough for Democrats, too.

In addition to Montana, red states including South Dakota, Louisiana, Arkansas and Alaska have sitting Democratic senators. Democratic incumbents could face difficult races in states like Minnesota, North Carolina and New Hampshire, as well.

With the political and legislative waters bound to get choppier, Baucus is recognizing early that he must begin laying the groundwork now for 2014 — both for his reelection bid and tax reform.

"The early bird gets the worm,” Baucus told POLITICO.

If Republicans take back the Senate, Utah Sen. Orrin Hatch is poised to become Finance Committee chairman — assuming he wins his own reelection bid. But given that the moderate Baucus is bound to wield significant influence in what will almost certainly be a narrowly divided chamber next Congress, Hatch and Baucus have met already to talk about tax reform.

And the two men — along with Camp and Rep. Sander Levin (D-Mich.), ranking member on the Ways and Means Committee — are expected to meet again after Hatch’s primary next month.

Already, the battle lines have been drawn in a tax debate centering on the Jan. 1 expiration of the Bush tax cuts. With Republicans dead set against higher taxes and Democrats demanding new taxes on the rich and corporations, Baucus will have to navigate that political minefield while trying to win some bipartisan support.

All the while, the left continues to look at Baucus warily because of his support for the 2001 Bush tax cuts and his failed efforts to cut a bipartisan deal with Republicans on health care. A recent poll by liberal-leaning Public Policy Polling found only 42 percent of Montanans approve of Baucus’s job performance, versus 46 percent who disapprove.

And Baucus would lose handily if Democratic Gov. Brian Schweitzer were to challenge him in a Senate primary, PPP found.

But Schweitzer has repeatedly denied his interest in the seat, and Tester said the outgoing governor reiterated that position to him personally.

“Max is a force — he’s been a force in Montana politics for a long, long time,” Tester said in an interview. “I’ve seen some of the polls that are out there. I don’t think they take into account his intestinal fortitude.”

Much like Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, who both wield heavy hands in their home state politics, Baucus has invested a lot of time in Montana building the state party over the years. He has stumped for local candidates and recruited office seekers, including Steve Bullock, the Montana attorney general, a Democrat running for governor this year. Bullock said in an interview that Baucus was one of the voices urging him to run.

Baucus also appears poised to smash fundraising records in his state, something he’s well-positioned to do given the scores of special interest groups looking to curry favor with him. His influential chairmanship and tight ties to Tester have left donors feeling pressured to contribute to Tester’s campaign, lobbyists say .

“He’s been very very helpful, not only with our ability to work together on policies that matter to Montana … but he’s also been helpful with donors,” Tester said of Baucus.

Baucus had $3.1 million cash on hand as of March 30, easily surpassing the $760,000 haul of former Republican Sen. Conrad Burns at a later point in his unsuccessful 2006 bid. Tester had just $441,000 at a similar point in his race two years ago.

But money alone may not be enough for Baucus, especially as he takes on the Tax Code, which hasn’t been reformed since 1986 — when Ronald Reagan was president and Baucus was in his eighth year in office.

Part of its success could come down to the Baucus-Camp relationship, which was grown during the supercommittee deliberations and payroll tax cut talks. The two have built a good relationship, something exceedingly rare in the hyperpartisan 112th Congress.

They sat next to each other at the State of the Union address and talk about once a week when the chambers are in session. Baucus and Camp may have joint hearings on tax reform later this year, Baucus said.

“Through his work in the Senate, Finance Chairman Baucus has demonstrated a commitment to working across Congress to transform our broken Tax Code to one that is simpler, fairer, flatter and easier for families and employers to deal with,” said a Camp spokesperson. “His engagement and willingness to look at issues with an eye toward solutions has helped move tax reform into the national dialogue.”

Other Republicans, though, say Baucus needs to step it up.

“I can assure you they’re not as aggressive as where we’re going to end up having to be,” said Sen. Richard Burr (R-N.C.), a member of the Finance Committee, when asked about Baucus’s efforts.